If yesterday’s 10Y Treasury reopening was “Yuuge”, then today’s 30 Year reopening of Cusip RU4 was just a little more subdued. Printing at 2.914%, it tailed the When Issued fractionally by 0.3bps, with the high yield coming well below December’s 3.152%.

The internals hit or miss, with the Bid to Cover of 2.316 printing in line with the 12MMA of 2.303 if below last month’s 2.392. This, however, was offset by strength in the Indirect takedown, which at 66.7% was the highest since last July, and above the 61.6% 12 month average. It confirms that foreign buyers, mostly central bankers, are very eager to reload on On The Run issues.

On the other hand, the Direct bidders were left with only 4.5% of the auction, the lowest since September 2009, which meant Dealers were let holding 28.8% of the auction.

In kneejerk reaction, there was some modest steepening in the curve as the long-end sold off on news of the tail, which in turn prompted a jump of about 20 pips in the USDJPY, which however is likely all due to trigger happy algos, and we doubt it will sustain itself as the auction was hardly poor.